Chapter 5 Market Is Less Active Since Gold Oscillates Narrowly （11.03）
Fundamentals
In Friday's (November 3rd) Asian session, spot gold oscillated narrowly, and it is now trading at 1985. Yesterday, market investors rushed into the market after the Fed issued a signal that the policy tightening cycle may end. Meanwhile, the U.S. bond yields dropped, the global stock market was ecstatic, and commodity futures grew tremendously (especially the ferrous). The most outstanding one is the iron ore as it rose even when the Chinese iron factories were losing, indicating that Chinese factories are rich and powerful. In contrast, the gold's performance was worse than expected as it oscillated by 10 dollars yesterday. Besides, it once surged to 1991 in the European and the U.S. sessions followed by a sharp retracement again, once fell to 1979, resulting in little tradable space. Yesterday's high did not meet our expected entry price at 1993 and missed the retracement by 10 dollars. But it was not a pity, as we did not suffer from any loss. At the same time, don't feel satisfied when you earn from subjective trading, because there will be a second time of modification to the trading plan. Short-term trading will make you happy but also will trap you. Thus, it is important to keep your original target when you trade!
Data: U.S. Initial Jobless Claims rose to 217,000 last week, a sixth consecutive weekly rise. It was expected to be 210,000. As of the week of October 21st, U.S. Continuing Jobless Claims reached 1.818 million from 1.783 million in the previous week. U.S. Challenger Job Cuts were 36,800 in October, compared with 47,500 in the previous month. U.S. Factory Orders grew by 2.8% YoY in September, the biggest increase since January 2021, compared with expectations for a 2.4% rise and a previous rise of 1.2%.
Geopolitical News: According to The Times of Israel, on the evening of November 2nd, local time, IDF spokesman Daniel Hagari held a press conference. He said that Israeli ground forces have been engaged in a fierce exchange of fire with Hamas militants in the Gaza Strip, and that Israeli ground forces have now completed the siege of Gaza City. In an editorial this week, Israeli dailies wrote that an October 18-19 poll in the newspaper Maariv showed that 48 percent of respondents supported the premiership of Benny Gantz, the former Minister of Defense, who is the head of the opposition centrist party in the newly formed coalition government. In comparison, Netanyahu's approval ratings are only 28 percent and is facing a liquidation that could come at any time.
Today's focus: October U.S. Nonfarm Payrolls data, Unemployment data and Non-Manufacturing PMI.
Technical Analysis
Gold rebounded yesterday with the support of a retracing dollar. It once reached 1990.8, but then plunged quickly to 1978.9, closing the daily chart with a small doji star (on the second consecutive day). It demonstrated a balanced bears/bulls momentum, indicating a need of signal to trigger a change in bears/bulls. At present, the rebound of gold weakens day by day, and the retracement shows that gold is under a weak pattern. Technically, a death cross will probably be formed in the MACD today, and a rounding top pattern will emerge as well. In general, the bullish momentum is still available, but in the short term, weakened technical and the need for consolidations will show up. We have to reconfirm that no trade is necessary until the oversold situation improves or a retracement emerges. If a technical overbought shows up, a recovery may be triggered by the overreaction of the market, even if the geopolitical issues continue. Moreover, the market oscillation will be enlarged as the Nonfarm Payrolls will be announced today. Thus, investors should wait for a short opportunity when gold appreciates during the European and the U.S. sessions.
Trading Recommendations: Sell at highs. If gold ascends to 1993, investors could go short with small positions, and set the stop-loss at 1998. To take profits, the first target will be at 1980, where they can reduce the position size and move the stop-loss to breakeven, and the second target should be at 1965. Meanwhile, if gold appreciates to 2008, investors could go short with small positions, and set the stop-loss between 2010 and 2012. The target to take profits will be the same as the first time.
Trading Recommendations
Trading direction: Short
Entry price: 1993
Target price: 1965
Stop loss: 1998
Support: 1970.000/1953.000
Resistance: 1983.000/1997.000
